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<p class="has-drop-cap">Oil prices fell over 2% on Tuesday after <a aria-label="new economic data from China (opens in a new tab)" href="https://www.reuters.com/markets/commodities/oil-prices-ease-market-awaits-china-data-gauge-demand-2023-11-07/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">new economic data from China</a> showed that the Asian country continues to deal with noteworthy risks despite recent improvements in local demand. The drop wiped <a href="https://tokenist.com/oil-prices-gain-as-russia-and-saudi-arabia-continue-supply-cut-other-factors/" rel="dofollow" class="deco-link">oil’s Monday gains caused by extensions of output cuts</a> by Russia and Saudi Arabia and persisting geopolitical risks in the Middle East. At the same time, it raised demand concerns among investors as <a href="https://tokenist.com/oil-drops-to-88-as-markets-brace-for-high-interest-rates-to-stay-longer/" rel="dofollow" class="deco-link">interest rates remain high</a> due to a slowdown in global economic growth.&nbsp;</p> 
<h3 id="oil-prices-the-lowest-in-over-two-months">Oil Prices the Lowest in Over Two Months</h3> 
<p>Oil prices took a blow on Tuesday after the mixed economic data coming from China offset yesterday’s boost caused by Saudi Arabia and Russia’s extended output cuts.&nbsp;</p> 
<p>Notably, Brent crude futures fell more than 2.2% to $83.20 a barrel – the lowest over two months. The West Texas Intermediate (WTI) crude also suffered a notable drop of around 2.1% to $79.58 per barrel, marking a 2.5-month low.&nbsp;</p> 
<p>Meanwhile, the premium on front-month loading Brent contracts compared to the ones loading in six months’ time also fell substantially, suggesting that market participants are less worried about the ongoing supply deficits.&nbsp;</p> 
<p>The dips come after <a aria-label="fresh reports showed (opens in a new tab)" href="https://www.reuters.com/world/china/chinas-imports-unexpectedly-grow-oct-exports-extend-declines-2023-11-07/#:~:text=Exports%20shrank%206.4%25%20from%20a,a%206.2%25%20fall%20in%20September." target="_blank" rel="noreferrer noopener nofollow" class="deco-link">fresh reports showed</a> that China’s total crude oil exports contracted at a faster rate than expected in October, while imports displayed strong growth both year-over-year and on a monthly basis. The mixed data indicates that the world’s second-strongest economy is facing persistent risks despite recent improvements in domestic demand.&nbsp;</p> 
<p>Furthermore, expectations of crude run reductions by Chinese refiners between this month and December could also weigh on oil demand and broaden the price declines.&nbsp;</p> 
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<h3 id="saudi-aramco-suffers-23-profit-drop-global-economic-growth-slows-down">Saudi Aramco Suffers 23% Profit Drop; Global Economic Growth Slows Down</h3> 
<p>Citing “the impact of lower crude oil prices and volume sold,” Saudi Arabia’s state oil behemoth Saudi Aramco <a href="https://www.cnbc.com/2023/11/07/oil-giant-saudi-aramcos-profit-slides-23percent-in-third-quarter-on-lower-crude-price-volumes.html" target="_blank" aria-label="recorded a 23% decline in net profit (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">recorded a 23% decline in net profit</a> in Q3 to $32.6 billion. Although the profit was notably lower than the $42.2 billion posted in the same quarter last year, it was still above the consensus estimates of nearly $31.8 billion.&nbsp;</p> 
<p>Aramco’s free cash flow fell to $20.3 billion, representing a decline of more than 50% from the $45 billion reported in Q3 2022.&nbsp;</p> 
<p>Looking ahead, the outlook of the oil market partly depends on whether Saudi Arabia and Russia, top oil exporters, are prepared to rein in production voluntarily beyond the end of 2023, in addition to a broader agreement among the OPEC+ producers. Analysts at Commerzbank believe that Saudis will “probably find it difficult to withdraw its production cuts at the end of the year,” as any expansion would create the risk of an oversupply in the first half of 2024.&nbsp;</p> 
<p>In the meantime, global economic growth <a aria-label="continues to slow down (opens in a new tab)" href="https://www.dailyfx.com/news/gold-cools-as-volatility-subsides-oil-sinks-on-grim-global-outlook-20231107.html" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">continues to slow down</a>, especially in Europe, where it appears that the bloc witnessed a contraction in the third quarter. In the US, the Fed revised its own forecast for Q4 growth, slashing it from 4% to around 1.2%.&nbsp;</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em><strong>Where do you think oil prices will stand at the beginning of 2024? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/oil-prices-hit-the-lowest-level-in-over-2-months-as-demand-likely-to-slow/">Oil Prices Hit the Lowest Level in Over 2 Months as Demand Likely to Slow</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Oil Prices Hit the Lowest Level in Over 2 Months as Demand Likely to Slow

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